2008 Nar Profile Of Home Buyers And Sellers

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2008 NAR Home Buyer and Home Seller Report

Transcript of 2008 Nar Profile Of Home Buyers And Sellers

  • 1.NatioNal associatioN of RealtoRsProfile ofHome Buyersand sellers2008

2. 2008 Officers President Richard F. Gaylord, CIPS, CRB, CRS, NATIONAL ASSOCIATION GRI OF REALTORS President-elect Charles McMillan, GRIThe Voice For Real Estate first Vice PresidentThe NATIONAL ASSOCIATION OF REALTORS , The Voice for Real Estate, Vicki Cox Golder, CRB is Americas largest trade association, representing more than 1.2 million Treasurer members, including NARs institutes, societies and councils, involved in all James L. Helsel, Jr.aspects of the real estate industry. NAR membership includes brokers, sales agents, property managers, appraisers, counselors and others engaged in immediate Past President Pat V. Combs, ABR, CRS, GRI, PMNboth residential and commercial real estate.Vice President & Liaison to The term REALTOR is a registered collective membership mark that committeesidentifies a real estate professional who is a member of the NATIONAL Mark Foreman ASSOCIATION OF REALTORS and subscribes to its strict Code of Ethics. Vice President & Liaison to Government AffairsWorking for America's property owners, the National Association provides a Robert Kulick, CCIM, GRIfacility for professional development, research and exchange of information chief executive Officer among its members and to the public and government for the purpose of Dale Stinton, CAE, CPA, CMA, RCEpreserving the free enterprise system and the right to own real property. 3. NatioNal associatioN of realtors Profile of Home Buyers and sellers 2008 2008 NatioNal associatioN of realtors 4. NatioNal associatioN of realtors 3 coNteNts introduction ....................................................................................................4the Housing environment ......................................................................5Highlights ......................................................................................................... 7chapter 1: characteristics of Home Buyers ...................................9chapter 2: characteristics of Homes Purchased .................... 23chapter 3: the Home search Process ......................................... 40chapter 4: Home Buying and real estate Professionals ...... 51chapter 5: financing the Home Purchase ................................. 62chapter 6: Home sellers and their selling experience ......... 70chapter 7: Home selling and real estate Professionals....... 87chapter 8: for-sale-by-owner (fsBo) sellers ......................... 96Methodology ............................................................................................ 105list of exhibits ........................................................................................... 106 O c t O b e r 2008 5. 4 2008 Profile of HoMe Buyers aNd sellers iNtroductioN F or Most HouseHolds, tHe PurcHase or sale of a HoMe is oNe of tHe most significant financial and lifestyle choices they can make. evenfor experienced buyers, the process is often complex and requiresa number of choices and decisions about such matters as location,commuting distance, type of home, price range and financingalternatives. sellers are faced with a different array of equallychallenging tasks on their path to the successful completion of ahome sale. Most home buyers and sellers rely on real estate professionalsto assist them with their transaction. surveys of both buyers andsellers consistently reveal that consumers value the guidance andadvice offered by real estate professionals. consumers expect realestate professionals to display high levels of knowledge, integrityand expertise. Most buyers and sellers report that their agent metor exceeded their expectations. in fact, a substantial majority of bothbuyers and sellers report that they would use the same real estateagent again or recommend that agent to others. the NatioNal associatioN of realtors surveys home buyersand sellers annually to gather detailed information about the homebuying and selling process. these surveys provide informationon demographics, housing characteristics and the experience ofconsumers in the housing market. Buyers and sellers also shareinformation on the role that real estate professionals play in homesales transactions. this report provides real estate professionals with insights into theneeds and expectations of their clients. What do consumers wantwhen choosing a real estate professional? How do home buyersbegin the process of searching for a home? Why do some sellerschoose to forego the assistance of an agent? the answers to thesequestions, along with other findings in this report, will help real estateprofessionals better understand the housing market and also providethe information necessary to address the needs of americas realPaul C. Bishop, Ph.D estate consumers. Harika Anna Barlett Danielle Hale 6. NatioNal associatioN of RealtoRs 5 the housiNG eNViRoNmeNt Alt h o u G h t h e pa c e o f a c t i V i t y i N t h e h o u s i N G m a R k e t h a s B e e N s l o W i N G since mid-2005, the past several months have proven even morechallenging for homeowners as well as home buyers and sellers.Beginning in the fall of 2007, credit markets faltered and ultimatelycame to a near standstill following large losses on mortgage-related securities at financial institutions. as these losses cascadedthroughout the financial system, lenders became increasinglyreluctant to underwrite mortgages for all but the most creditworthy. as credit market conditions tightened, the inventory of homes forsale rose markedly. Not only did those households compelled tosell their home for customary reasons such as job relocation placetheir home on the market, but rising foreclosures and sellers facingpossible foreclosure added to the number of homes for sale. oneconsequence was a further decline in home prices as buyersbargained more aggressively while sellers had little recourse but tolower prices sufficiently to complete a sale. despite a large selectionof homes and lower prices in many areas, some potential buyerstook a wait and see attitude and have remained sidelined. as of fall 2008, the outlook for the economy and housing marketis cloudy. policymakers in the u.s. and abroad have taken actionsaimed at restoring confidence in financial markets in order toforestallto the extent possiblespillovers to the overall economy. for home buyers and sellers, the current environment is morechallenging than at any time in several years. still, buyers and sellersare overcoming hurdles leading to the successful completion ofhome sales transactions. But, buyers and sellers are also makingcompromises and changing expectations along the way, mostnotably in the financing of their home. for example, buyers whocompleted their home purchase by the end of september 2007more frequently financed 100 percent of the purchase price thanbuyers who completed a transaction since september (26 percentversus 21 percent). this shift has also required buyers to dependon savings for a downpayment more frequently since fall 2007.furthermore, when asked about the timing of their home purchase,a greater share of buyers who purchased a home after september 7. 6 2008 Profile of HoMe Buyers aNd sellers 2007 (16 percent) indicated that improved affordability of homes influenced when they made their home purchase compared with those that purchased before the onset of the turmoil in credit markets (6 percent).With the increase in foreclosures, some home buyers have been more willing to consider such properties when searching for a home. although still a small percentage, 6 percent of recent home buyers reported that they purchased a foreclosed property, up from 1 percent or less in recent years. When searching for a home, four in ten buyers considered properties in foreclosure, but noted that they could not find a property that they liked or had concerns about the complexity of the purchase process.While home buyers and sellers are right to consider current conditions, it is important to remember that housing is also a long- term investment with both financial and non-financial rewards. over a period of several years even in markets experiencing lower than average rates of price appreciation equity gains remain one of the chief sources of household wealth accumulation. in addition to the potential financial gains, buyers routinely point to other reasons for their home purchase. chief among these is a desire to own a home to accommodate changing lifestyle considerations such as a growing family, retirement or job relocation. 8. NatioNal associatioN of realtors 7 HiGHliGHts CharaCteristiCs of home Buyers nForty-one percent of recent home buyers were first-time buyers. nThe typical first-time home buyer was 30 years old, while the typical repeatbuyer was 47 years old. nThe 2007 median household income of buyers was $74,900. The medianincome was $60,600 among first-time buyers and $88,200 among repeatbuyers. nAbout one-quarter of first-time buyers identified their race or ethnicity asnon-white. nTwenty percent of recent home buyers were single females, and 10 percentwere single males. nFor two-thirds of recent home buyers, the primary reason for the recenthome purchase was a desire to own a home. CharaCteristiCs of homes PurChased n New home purchases were 21 percent of all recent home purchases, downsomewhat from 23 percent one year before. nThe typical home purchased was 1,825 square feet in size. nSeventy-eight percent of home buyers purchased a detached single-familyhome. nThe median price of homes purchased was $218,000 in the Northeast,$174,500 in the Midwest, $185,000 in the South, and $267,000 in theWest. nWhen considering the purchase of a home, commuting costs wereconsidered very or somewhat important by 80 percent of buyers. the home searCh ProCess n For one-third of home buyers, the first step in the home-buying processwas looking online for properties. nEighty-seven percent of all home buyers a